Recession fails to dent flow of remittance into Kerala banks

Thiruvananthapuram: Recession is a good time for banks in Kerala as the flow of remittance is increasing. While the number of emigrants from Kerala rose by 19% to 21.9 lakh during 2003-08, remittance rose by 135% (Rs43,300 crore), according to a study by the Centre for Development Studies, Thiruvananthapuram.

“The financial crisis should have brought down the flow of remittance. But in the case of Kerala (and India as a whole), the global crisis has partly contributed to the increase in remittance. The recession and the subsequent closure of many international banks prompted most Kerala emigrants to park their savings in nationalised banks, which were thought to be much safer than the foreign banks,” the study concluded.

The Migration Monitoring Study, 2008, the latest in a four-part series, stated that high oil price and depreciating dollar were also responsible for the increase in remittance to Kerala. Remittance forms 30.73% of Kerala’s state domestic product as against 25.49% in 1998 and 22.4% in 2003. In 2003, 18.4 lakh expatriates were contributing Rs18,400 crore.

Emigrants bucked the trend in times of recession. The increase in remittance is at odds with the common belief that emigration from Kerala would decline as a result of the global recession that affected West Asia and other destinations favoured by Keralites.

The number of emigrants from Kerala has increased from 13.6 lakh in 1998 to 18.4 lakh in 2003 and 21.9 lakh in 2008. Simultaneously, the number of emigrants who have returned to Kerala has increased from 7.4 lakh in 1998 to 8.9 lakh in 2003 and to 11.6 lakh in 2008. As a result, the number of non-resident Keralites rose from 21.0 lakh in 1998 to 27.3 lakh in 2003 and 33.5 lakh in 2008.

The new generation of Keralalites prefers global cities like Dubai and Kuwait to Indian metros like Delhi, Mumbai, Bangalore, Chennai and Kolkata where previous generations flocked to. The proportion of emigrants to West Asia remains constant at 89% since 2003. If 37.5% of emigrants went to Saudi Arabia in 1998, the number went down to 23% 10 yearslater. Meanwhile, expatriates in the UAE rose to 41.9% from 31%in 1998.

In 2008, corresponding to every 100 households in Kerala, there were 29 emigrants, 15 emigrants who had returned and 44 non-resident Keralites.